Leak: EC knows Gazprom abuses. There will be no consequences?

Commission’s documents reveal how Gazprom abused its dominant position on the EU gas market. DG COMP Statement of Objections against Gazprom leaked earlier this week in Brussels, as the Commission struggles to finalize the antirust proceeding before the construction of Nord Stream 2 starts.

The documents reveals a broad portfolio of instruments Russia used to maintain its gas grip over Central European countries. The documents also clearly prove that the Commission failed to devise measures which would prevent Gazprom from breaching antitrust law. In contrast, it is speeding up the proceeding to clear ground for the expected start of Nord Stream 2 construction.

Brussels was astounded when earlier today the DG COMP Statement of Objections together with an accompanying résumé, was circulating in the European Parliament, and leaked to the EU diplomats. The most secret document of Commissioner Vestager indicating a 270 pages long list of Gazprom violations of EU gas and competition law, has been hidden from the public since 2015. Just weeks before the expected closure of the antitrust proceeding the public opinion has learned the details of how Gazprom manipulated, blackmailed and threatened the Central European Member States in order to maintain its monopoly of gas supplies. Unfair pricing, territorial restrictions, making the gas supplies conditional upon granting control of transmission infrastructure – these are just examples of the grim picture reveales by the Commission in its Statement of Objections.

However, the documents also show, that Commission failed to establish limits to Gazprom anticompetitive behavior. In the so called Commitments, accepted by Gazprom and the Commission in 2017 a number of issues raised in the Statement of Objections were not properly addressed. For example, the option to change delivery points will allow for swaps of Russian gas, but only if Gazprom approves. Gazprom unfair pricing policy has not been addressed at all, and left to international arbitration courts to be resolved in future. We also learn that the Commission had identified that unfair pricing occurred in Member States that the antitrust proceeding did not cover. However, Commission chose to conceal this issue in the Statement of Objections.

Finally, we learn that the Commission decided not to interfere with respect to the Gazprom’s abusive control over Yamal pipeline, because of an existing Polish – Russian Intergovernmental Agreement. “It seems we have crossed yet another level of ridiculousness. According to the EU Commission the bilateral IGA between a Member State and a third country stands higher in the legal system than the EU Treaty!” – states a Brussels official involved in the antitrust proceeding.

Commission has sped up the antitrust proceeding this year. Last week, Reuters disclosed that the antitrust proceeding is to be finalized by the end of April, most probably to clear ground for the envisaged start of Nord Stream 2 construction. As the struggle to stop NS2 is entering its hottest phase, with US imposing sanctions on Gazprom, the question remains whether DG COMP is on the right side of this struggle.